2020 Tacoma Lease Payment

Sorry if it has been posted... What are you guys seeing for residual values?

I may have missed it in the sea of financial advice/people that don't understand leasing posts.

 

2018 TRD OR DCLB w/ Tech. MSRP $39,600. Residual is $28k give or take a few hundred.

 

The reason why I'm planning on leasing is because I want the lower monthly payment now, planning on buying a home next year and showing that I have a low monthly payment will give me a higher preapproval on my mortgage loan. It has nothing to do with being able to afford it. Also I qualify for a .01% interest on the lease so hell yeah I'm going to take advantage of it. I just wanted to know if a $250 payment is realistic for the dealer to do. I do plan on keeping the vehicle at the end of the lease term so going over the miles or damaging the truck doesn't really matter to me.

 

I was able to negotiate a 2019 TRD Sport V6 4x4 with an MSRP of $37,825 down to $33,058 (almost 5K discount), with a true sign & drive ($0 down, not even the first payment) a 36/12K lease for $299/month, that's 35 payments, so in reality is $290/month (equivalent in 36 months).

I am planning to keep the Tacoma after lease end. The residual is 77% of MSRP = $29,125 and the MF = 0.00141. If I decide to buy it at lease end it will be: $299 * 35 (lease) + $29,125 (residual) + $1,893 (taxes over residual) + $400 (acquisition fee) = $41,883. That seems a super high number for a car that is selling for $33,000.

On the other side, If I finance the car with TFS 0% for 48 months promotion, the cost is: $33,058 (sale price) + $2,104 (taxes) + $1,587 (fees) = $36,750, this is 5K less than the lease option. Definitely a better option to finance vs lease (assuming I am going to buy it at the end). In this case the payment is $765/month, but in 4 years I am done and probably the car at that point has a residual of $28,000 (I drive around 5K miles/year), meaning; it costed me $8,750 ($182/month) to use the car for 4 years, much better than a lease.

Tomorrow I am going to the dealer to get the car, I am still undecided if I should lease it and just return it at the end, or buy it. I can also sell it after 3 years, and the Tacomas don't depreciate a lot.

What would you do in my place? Thanks

 

If you buy it or sell it before lease end, you don’t pay the disposition fee. It will probably be worth more than the buyout at the end of the lease or even before the lease is up, you would have equity to use for another purchase or to sell it outright and pocket the money. If you plan to keep the truck long term and can afford a higher payment then buy it, if you think you’ll want something else in a couple years then lease and enjoy the lower payment. Also a bonus if you lease, the 400~ a month you save could be invested or used to pay down a mortgage.

 

I agree with this. The main reason I lease is because I rarely keep anything more than a couple years. Second is to keep the payment low. If you are sure you’re keeping it, buy it. If not. Lease it and see how you feel in a year or so.

 

I definitely like the lease option, low payment and I have the opportunity to test it first (I haven’t had a truck before), but the challenge is that to buy it at lease end it becomes to expensive because residual is calculated based on MSRP (38K) and not the sale price (33K), unless I am calculating something wrong in my previous analysis.

 

With the current numbers (unless I made the wrong assumptions) once I pick the lease option it becomes too expensive to buy it at lease end, it seems to I don’t have that flexibility due to the higher cost

 

How will it be worth more than residual value? You paid for the miles up front. If you turn it in it will be same with low or leased miles. If you trade it and not turn it in it may be a little better but not much.

 

Unless you can be assured that the $2k is being used to reduce the cap cost on top of the already negotiated price.

I wouldn't tell them you want to lease. Instead, I would negotiate the MSRP down to whatever figure you can. Then ask them to show you a lease payment based on that price as the cap cost. Make sure the term is no longer than 3 years and have it adjusted to whatever miles you'll drive during that time. Calculate that accurately. Use too many and it can get pricey at the end of the lease. Use too little and you've paid for miles that you never used.

Once they figure the lease payment on that negotiated cap cost, 3 years of use and your projected mileage usage, ask them to now show you the same lease terms with your $2k reducing the cap cost even more. Make sure they aren't simply resetting the cap cost back to MSRP and reducing it $2k with your money.

The Taco holds its value well, so the residual should be healthy. You might find the difference in payment isn't worth throwing your $2k in there. Its simple to calculate. Take the difference in the two payments X 36 months. If the savings isn't greater than $2k....hang on to your money.

Leasing 101. You're paying for the depreciation of the vehicle. Basically the difference between the cap cost (price for lack of a better term) and the residual (projected worth at the end of the lease). And never set the term beyond the basic bumper to bumper factory warranty.

Always start out a negotiation the same way...MSRP...regardless of whether you are buying or leasing. If you decide leasing is a good option make sure the price you settled on is what's used as the cap cost.

Never walk in a dealership and say, "I want to lease a vehicle for $XXX a month

 

I was about to sign off on a 5 year Lease, but opted for a 6 year Purchase. They just wanted too much for a buyout after 5 years!

 

Leasing can be smart if you like a new vehicle every 2-3 years. You're only paying for the depreciation while you have it. It can keep you in a newer vehicle, under warranty with a payment that is typically lower than an equivalent vehicle on a 60-72 month buy (but not always).

Don't lease beyond the basic OE warranty. And never throw a bunch of cash at a lease. Let the dealer reduce the cap cost. If the difference in payment warrants some cap reduction on your part...that's fine. But do the calculation I gave in my previous post to see if that's worth it.

Remember....a vehicle is not an investment. It's a depreciating asset.

 

Your numbers and calculations looked accurate. In your case if you can swing the $750 a month and a a $33k purchase price I would say buy it. With 0% on a 48 month loan and such a strong resale value you’ll likely have positive equity in the first 6 months. So even if you don’t like it you’ll be good to sell it or trade it. On a lease you’ll have to wait much longer to be in the black.

 

UPDATE: Went to the dealership today, they offered me a 2020 TRD Sport 2WD with the Premium Sport and Technology packages MSRP $40K for $400/month lease with $1K down, all in (taxes, fees, etc.) is it a good deal? Thanks

 

What were your last few vehicles and when did you buy each?

 

I leased mine in July of ‘18 for $285 a month with $0 down. You can do much better.

 

What's the cap cost, residual and term?

Have to know this stuff before we can tell you whether it's a good deal or not

 

Residual is 72%, MF = 0.00205, 36 months, 12K miles, the MSRP is $40K and they are reducing the price of the truck by $4,500, sale price is $35,500 + taxes, fees, etc.

The truck has the Technology Package and the TRD Premium Sport Package.

 

So you're 100% positive they're using the $35.5 as the cap cost?

And 72% of MSRP?

 

I would assume so, are there rules that define what numbers to use for the calculation?